In this article, we will take a look at billionaire Ken Fisher’s top 10 stock picks.
Ken Fisher, the founder and co-chief investment officer of Fisher Asset Management, is widely known for his contributions to various financial publications as an author. Fisher is known for his contrarian investment strategies and his outspoken personality, which has sometimes landed him in controversy. Fisher said earlier this year that investors can strategically position their portfolios to benefit from the start of a new bull market by investing in categories that suffered the most during the bear market. Fisher believes that the market entered a new bull phase in October 2022 and expects growth-oriented sectors like information technology, which struggled last year, to perform well in the early stages of this phase.
Ken Fisher discussed the “pessimism of disbelief” in a recent video. According to Fisher, this pessimism occurs when investors reject positive news, assuming it will eventually turn negative. He sees this type of pessimism as a positive sign for stocks since it’s common at the beginning of bull market cycles.
Fisher’s 13F portfolio value increased from about $148 billion in Q4 2022 to $165 billion in Q1 2023. During the first quarter, the fund added 181 new investments to its portfolio, increased its holdings in 377 existing stocks, divested from 52 equities, and decreased its positions in 510 stocks. The top ten stock positions add up to 26.02 % of the portfolio. Some of the most popular companies included in Ken Fisher’s Q1 portfolio include Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL).
Our Methodology
For this article we picked the top 10 stocks from Ken Fisher’s hedge fund portfolio for the first quarter of 2023.
Billionaire Ken Fisher’s top stock picks
10. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Fisher Asset Management’s Holdings: $2,346,771,000
Percentage of Fisher Asset Management’s Portfolio: 1.42%
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s largest chip manufacturer.
In the first quarter, Ken Fisher increased his stake in Taiwan Semiconductor Manufacturing Company Limited by 4%, and his 1.42% stake in the company is now worth about $2.35 billion. The most prominent shareholder in Taiwan Semiconductor Manufacturing Company Limited is Rajiv Jain’s GQG Partners, with 9,197,003 shares.
Like Amazon.com, Inc., Microsoft Corporation, and Apple Inc., Taiwan Semiconductor Manufacturing Company Limited is one of the top stock picks of billionaire Ken Fisher.
Wedgewood Partners commented on Taiwan Semiconductor Manufacturing Company Limited in its investor letter for the Q1 of 2023.
“Taiwan Semiconductor Manufacturing Company Limited contributed to performance as revenues grew +27% (in USD) from the year ago quarter. Despite this strength, the Company’s customers have seen near-term weakness in demand due to Covid-19 normalization as well as the launch timing of new products. However, the Company is well-positioned to continue a long-term growth trajectory because its leading-edge capacity is being absorbed by high-performance computing applications, particularly at nontraditional integrated circuit (IC) design houses, such as Apple, Alphabet and Amazon, which have become IC-design powerhouses over the past decade. Importantly, the Company’s aggressive investment in leading-edge equipment, tight development with fabless IC designers, and embrace of open development libraries, should continue to foster a superior competitive position and attractive long-term growth.”
9. The Home Depot, Inc. (NYSE:HD)
Fisher Asset Management’s Holdings: $2,478,511,000
Percentage of Fisher Asset Management’s Portfolio: 1.5%
The Home Depot, Inc. (NYSE:HD) is a leading home improvement retailer with over 2,300 stores and a strong omnichannel network.
Fisher Asset Management started building its position in The Home Depot, Inc. in the first quarter of 2012 and, in the first quarter of 2023, holds over 8.40 million shares in the company, valued at $2.49 billion. The company represents 1.5% of the hedge fund’s 13F portfolio.
In its Q1 2023 investor letter, Madison Investments provided a comment regarding The Home Depot, Inc.:
“The Home Depot, Inc. provided an update on reducing the environmental impact of its stores. Since 2010, the company has reduced U.S. store electricity use by 50% by implementing LED lighting across all of its stores, buying electricity from large-scale commercial solar farms, and installing rooftop solar farms. The company is now applying its experience to other parts of its operations, including reducing electricity use in its supply chain and water use in store irrigation. Home Depot was also recognized by the U.S. Environmental Protection Agency for being one of the nation’s largest green power users.”
8. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Fisher Asset Management’s Holdings: $2,579,321,000
Percentage of Fisher Asset Management’s Portfolio: 1.56%
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a semiconductor company that makes chips for various applications, including PCs, gaming, cloud services, and automotive.
On May 3, Truist analyst William Stein increased Advanced Micro Devices, Inc.’s price target to $84 from $79, but maintained a ‘Hold’ rating on the stock. Despite the company’s revenue exceeding expectations due to the upside in Gaming and Embedded segments, the analyst is concerned about AMD’s weaker Q2 guidance and increasing investments in AI.
Fisher’s hedge fund also strengthened its position in Advanced Micro Devices, Inc. by buying 431,867 additional shares in Q1.
In its investor letter for Q1 2023, White Falcon Capital Management provided a comment regarding Advanced Micro Devices, Inc..
“Last quarter we added Advanced Micro Devices, Inc. to the portfolio at 18x earnings and quickly made it into a top 5 position. At that time, Mr. Market was worried about earnings revisions for semiconductor stocks. In Q1 2023, it has been one of our best performing positions with the stock up 50%! In just three months, the market realized that Artificial Intelligence (AI) and related technologies require a lot of semiconductors. Mr. Market really is manic depressive but this volatility can give the enterprising investor just enough of a window to pick stocks with attractive risk rewards.”
7. NVIDIA Corporation (NASDAQ:NVDA)
Fisher Asset Management’s Holdings: $2,798,969,000
Percentage of Fisher Asset Management’s Portfolio: 1.69%
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, compute, and networking solutions globally.
Ken Fisher is also bullish on NVIDIA Corporation as of the end of the first quarter of 2023. His fund increased its holding in NVIDIA Corporation by 1% in the first quarter, ending the period with over 10.08 million shares of the company.
GQG Partners, with 8,247,311 shares, is the biggest stakeholder in the company.
Baron Funds made the following comment about NVIDIA Corporation in its Q1 2023 investor letter:
“NVIDIA Corporation is a semiconductor mega-cap company and global leader in gaming cards and accelerated computing hardware and software. Shares of NVIDIA rose over 90% during the first quarter because of material developments in generative AI evidenced by the release of ChatGPT and other competitive models. On its fourth quarter fiscal 2023 earnings call on February 22, Colette Kress, NVIDIA’s CFO said, “AI adoption is at an inflection point.… The opportunity is significant and driving strong growth in data center that will accelerate through the year.” On the same call, Jensen Huang, NVIDIA’s CEO emphasized: “The accumulation of technology breakthroughs has brought AI to an inflection point. Generative AI’s versatility and capability has triggered a sense of urgency at enterprises around the world to develop and deploy AI strategies.… NVIDIA AI is essentially the operating system of AI systems today.… The activity around AI infrastructures…has just gone through the roof in the last 60 days. And so there’s no question that whatever our views [were] of this year as we enter[ed] this year has fairly dramatically changed as a result over the last 60, 90 days.” Indeed, our research indicates that shortages of NVIDIA GPUs3 are the biggest gating factor for AI adoption and that about 90% of AI-model training runs are performed on their GPUs. During its annual GTC conference4 in March, NVIDIA announced new products and services that expand its addressable market and together form a full AI computing platform. These included: (1) new AI training systems (where it is dominant) and inferencing systems (where the field is more wide open), such as specialized chips in the areas of large language models and recommender systems, simulation and graphics rendering, and video use cases; (2) new fully managed AI services in partnership with the major cloud service providers, called NVIDIA DGX Cloud and NVDIA Omniverse Cloud; (3) new domain-specific generative AI foundational models, branded NVIDIA AI Foundations, which NVIDIA customers can harness to build and train custom language models with their own proprietary data to develop differentiated offerings; and (4) industry-specific accelerator libraries, spanning such diverse verticals as genomics analysis and computational lithography. We continue to believe NVIDIA’s end-to-end AI platform and leading market share in gaming, data centers, and robotics (including automotive), along with the size of these markets, will enable the company to drive durable growth for years to come.”
6. Salesforce, Inc. (NYSE:CRM)
Fisher Asset Management’s Holdings: $2,801,441,000
Percentage of Fisher Asset Management’s Portfolio: 1.69%
Salesforce, Inc. (NYSE:CRM) provides global Customer Relationship Management (CRM) technology.
Based on the 13F holdings for the first quarter of 2023, Fisher Asset Management owns 14.02 million shares in Salesforce, Inc. after boosting its holding by 2% from the fourth quarter of 2022. The most prominent shareholder in Salesforce, Inc. is Starboard Value LP.
Along with Amazon.com, Inc., Microsoft Corporation, and Apple Inc., Salesforce, Inc. is one of the top stocks on the radar of billionaire Ken Fisher.
In its investor letter for Q1 2023, Vulcan Value Partners shared a comment about Salesforce, Inc.:
“Salesforce, Inc. was a material contributor during the quarter. The company has taken numerous positive steps to increase profitability more quickly than expected. Salesforce also improved its corporate governance by recommending three new board members. The company is focused on improving margins, deemphasizing acquisitions, and has expanded its stock buyback plan from $10 billion to $20 billion. We believe Salesforce can pursue these opportunities while continuing to increase its competitive position.”
5. ASML Holding N.V. (NASDAQ:ASML)
Fisher Asset Management’s Holdings: $3,217,200,000
Percentage of Fisher Asset Management’s Portfolio: 1.94%
ASML Holding N.V. (NASDAQ:ASML)’s dominance in the semiconductor-making equipment market, particularly in extreme ultraviolet lithography, positions it to become a $1 trillion company. Despite facing weak demand, the company has achieved a 13% increase in sales in its most recent quarter, with an annualized growth rate of 15% required to reach a $1 trillion valuation by 2023.
In the first quarter of 2023, Fisher Asset Management bought 2,921 shares of ASML Holding N.V. stock, boosting its stake by about 1%. At the end of the quarter, the hedge fund held more than 4.73 million shares of ASML, worth about $3.22 billion.
Here is what ClearBridge Investments said about ASML Holding N.V. in its Q4 2022 investor letter:
“ASML Holding N.V. makes semiconductor chip manufacturing equipment and is a leading supplier of lithography systems to the semiconductor industry. We expect ASML to grow above expectations as its innovative EUV technology is deployed and industry capacity expands. This in turn should lead to margin expansion and earnings leverage. In addition to more visible growth and profitability drivers relative to Intel, ASML also has a stronger balance sheet and higher returns on capital. As a semiconductor capital equipment provider, ASML directly improves the energy efficiency of semiconductor manufacturing, and governance and diversity initiatives at ASML are best in class.”
4. Amazon.com, Inc. (NASDAQ:AMZN)
Fisher Asset Management’s Holdings: $4,272,714,000
Percentage of Fisher Asset Management’s Portfolio: 2.58%
Amazon.com, Inc. is a retail giant that sells consumer products and subscriptions online and in physical stores worldwide.
Amazon.com, Inc. has featured on Fisher Asset Management’s portfolio since the third quarter of 2015.
In its investor letter for Q1 2023, Diamond Hill Capital provided a comment regarding Amazon.com, Inc.:
“We did have several strong performing stocks this quarter. Our top contributors to return included NVR, Amazon.com, Inc., Alphabet, Microsoft and Booking Holdings, all of which posted double-digit gains.
Global online retailer Amazon reported mixed quarterly results as improvement in retail profitability was offset by weakening demand at AWS (Amazon Web Services). Management responded with another round of layoffs (focused in high-margin areas like AWS and advertising) that will help protect margins until cloud and ad demand improves. We believe Amazon’s competitive advantages will continue to grow and that the business has the potential to grow faster than the overall economy in the coming years.”
3. Alphabet Inc. (NASDAQ:GOOG)
Fisher Asset Management’s Holdings: $4,371,802,000
Percentage of Fisher Asset Management’s Portfolio: 2.64%
Alphabet Inc. (NASDAQ:GOOG) is a global company with various products and platforms in Google Services, Google Cloud, and Other Bets.
On April 26, Deutsche Bank’s Benjamin Black reiterated a ‘Buy’ rating on Alphabet Inc. shares and raised the price target from $120 to $125 after the company reported “solid” Q1 results.
Ken Fisher’s Fisher Asset Management increased its position in the company to 42.15 million shares in the first quarter.
Here is what Diamond Hill Capital said about Alphabet Inc. in its Q1 2023 investor letter:
“We did have several strong performing stocks this quarter. Our top contributors to return included NVR, Amazon, Alphabet Inc., Microsoft and Booking Holdings, all of which posted double-digit gains. Shares of media and technology giant Alphabet outperformed as the company announced expense discipline while continuing to invest in its core products of Google Search, YouTube and Google Cloud.”
2. Microsoft Corporation (NASDAQ:MSFT)
Fisher Asset Management’s Holdings: $7,051,906,000
Percentage of Fisher Asset Management’s Portfolio: 4.27%
Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. Deutsche Bank increased Microsoft’s price target to $340 from $310 and maintained a ‘Buy’ rating on the shares after the Q3 earnings report on April 26.
Billionaire Ken Fisher’s Fisher Asset Management has kept a stake in Microsoft Corporation since Q4 2010.
Diamond Hill Capital made the following comment about Microsoft Corporation in its Q1 2023 investor letter:
“We did have several strong performing stocks this quarter. Our top contributors to return included NVR, Amazon, Alphabet, Microsoft Corporation and Booking Holdings, all of which posted double-digit gains.
Shares of software and IT services provider Microsoft rallied as investors became less cautious about the potential for growth deceleration in Azure, its public cloud business, and more focused on opportunities in search after the company announced an investment in and long-term partnership with OpenAI, the company that developed ChatGPT. Microsoft’s net cash balance sheet also seemed to gain appreciation from investors who became more cautious about the economic cycle.”
1. Apple Inc. (NASDAQ:AAPL)
Fisher Asset Management’s Holdings: $8,632,250,000
Percentage of Fisher Asset Management’s Portfolio: 5.22%
Apple Inc. is a global company that creates, produces, and sells various products including smartphones, personal computers, tablets, wearables, and accessories.
Canaccord analyst T. Michael Walkley maintained a ‘Buy’ rating on Apple Inc.’s shares and raised the price target from $180 to $185 on May 5. In the first quarter of 2023, Fisher Asset Management held 52.35 million shares of Apple Inc. worth over $8.63 billion, representing 5.22% of the firm’s total portfolio. The hedge fund decreased its stake in Apple Inc. by 13% in the first quarter of 2023.
In its Q1 2023 investor letter, RiverPark Advisors shared a comment about Apple Inc.:
“Apple Inc.: Apple shares were our final top contributor for the quarter. While the company reported a rare quarterly earnings miss, investors had expected slower sales due to macro headwinds. Services continue to be a bright spot for the company with an all-time high of $21 billion in quarterly revenue, a 6% year-over-year increase, and management expects iPhone revenue growth to re-accelerate in 2Q. Operating Cash Flow was $34 billion for the quarter, and the company returned $23 billion to shareholders in the last three months, including $4 billion in dividends and $19 billion in share repurchases.
With an installed base of 2 billion active devices and significant growth of the company’s recurring revenue Services segment (now 18% of revenue), we believe that Apple remains one of the most innovative, best-positioned and most profitable companies in the mobile technology industry.”
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This article is originally published at Insider Monkey.
